Stumbo v. United States

• Decision Date: 01 June 1937
• Docket Number: No. 7234.,7234.
• Citation: 90 F.2d 828
• Parties: STUMBO et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Sixth Circuit

90 F.2d 828 (1937)

STUMBO et al. v. UNITED STATES.

No. 7234.

Circuit Court of Appeals, Sixth Circuit.

June 1, 1937.

COPYRIGHT MATERIAL OMITTED

Sawyer A. Smith, of Covington, Ky., and George B. Martin, of Catlettsburg, Ky. (A. J. May, C. B. Wheeler, Allen & Tackett, and Howard & Mayo, all of Prestonsburg, Ky., on the brief), for appellants.

Mac Swinford, of Lexington, Ky. (Claude P. Stephens, of Prestonsburg, Ky., on the brief), for the United States.

Before MOORMAN, SIMONS, and ALLEN, Circuit Judges.

SIMONS, Circuit Judge.

The appellants complain of a conviction on the first count of a twenty-one count indictment, which, as construed by the court, charged them with having conspired to commit an offense against the United States in the use of the United States mails in furtherance of a scheme to defraud, as defined by section 338, 18 U.S.C.A. The trial lasted nineteen days, the evidence consumes over 3,000 pages of transcript, and the assignments of error cover 111 printed pages of a 1,453-page record. Errors are assigned to the sufficiency of the indictment, the failure of the court to require an election of counts upon which prosecution should proceed, refusal of severance as between classes of defendants, denial of a motion for more specific bill of particulars, admission of incompetent and exclusion of competent evidence, failure to give requested instructions, and errors in instructions given, and failure to direct a verdict for the defendants.

The prosecution was based upon the activities of certain members of a relief committee set up by the Kentucky Relief Commission to distribute funds appropriated out of the Treasury of the United States for the care of destitute persons in Floyd county, Ky., upon the activities of certain employees and agents of the committee, and those of merchants upon whom orders were drawn. A proper appraisal of the sufficiency of the indictment, and contentions as to the fairness of the trial, requires consideration of the setting in which the alleged conspiracy was conceived and the acts in furtherance of its object committed.

Under regulations adopted by the Relief Commission, the Floyd County Committee was required to ascertain the persons in need of relief and to provide them with orders upon local merchants for food and clothing. They were then to receive merchants' supply orders on form 6. These could be taken to designated grocers or clothiers, who would furnish the supplies therein specified. The merchant was required to witness the signature of the beneficiary to a receipt for goods supplied, and to certify upon the order that he had delivered them. The merchant would then list on form 7 the supply orders filled and certify that he had properly filled them. Upon mailing form 7 to the Relief Commission at Louisville he would receive a check for the value of the supplies furnished. He was permitted, however, to assign supply orders to wholesalers in payment of merchandise by means of form 7 A.

The appellant Stumbo, county judge of Floyd county, and appellant Carter, mayor of the city of Prestonsburg, were members of the county committee, the latter one of its disbursing officers. Appellants Woods and Otto Fannin were also members of the committee, appellants Nicholls, Salisbury, Sandidge, George, and Hatcher were its employees, and appellants May, Preston, G. R. Fannin, Mayo, Boyd, Hatfield, and Cyphers were merchants in Prestonsburg and other places in the county. It was the theory of the Government that Stumbo and Carter, who were men of great political influence, dominated the committee, had increased it from six to nine members, and filled it with their political and personal friends; that Powers, the original disbursing officer, having refused to enter into any unlawful scheme, was by them removed, and Carter and Nicholls substituted; that after the formation of the conspiracy they had caused large numbers of relief orders to be issued and delivered directly to the merchant conspirators, who made false certificates thereon, mailed them to the Relief Commission, and received checks in return for the amounts therein indicated. During the existence of the conspiracy, from March or April, 1933, until September, 1934, there was sent into Floyd county $381,312.66 — sufficient to adequately provide for all destitute persons of the county, but it was discovered that hundreds of relief orders never reached the beneficiaries to whom they were issued, and that the purported receipts for merchandise were not by them signed. Numerous orders were received from merchants by the Commission which showed no evidence of having been handled, and bore numbers in sequence. It was thought by the government investigators, therefore, from this and other evidence brought out at the trial, that the alleged fraud could have been perpetrated by the merchants only with the knowledge and acquiescence of the disbursing officers and members and employees of the committee all acting in concert, and so a presentment was made to the grand jury.

The indictment resulting in an extraordinary and unusual opus. Each of its first twenty counts sets up an alleged scheme to defraud devised by the appellants and others for the purpose of defrauding the State of Kentucky, the United States, the state and federal relief agencies, and others; that the purpose of the scheme was to steal, purloin, embezzle, misapply, and convert to the use of the appellants and others funds appropriated for relieving the necessities of the destitute people of Floyd county. It describes the scheme, however, not only as one devised or in contemplation, but also as one executed, reciting a succession of acts by which it was brought to fruition. Each count then includes an allegation that the defendants caused to be placed in the United States mails a letter in a sealed envelope addressed to the Administrator of the Kentucky Relief Commission at Louisville, with postage prepaid, and containing forged and fictitious relief orders. Each of the first twenty counts, however, describes the scheme variously as "a scheme, conspiracy and device to defraud," or as "a conspiracy, scheme and artifice to defraud." Following the twentieth count is a section of the indictment headed "Overt Acts." Here, in independently numbered paragraphs, are recited thirty-five separate and distinct acts, each committed by one or more of the defendants, but not including the acts of mailing the twenty several letters recited in the preceding counts. Then follows count 21, which charges a conspiracy in the words of the statute, and which incorporates by reference as acts done in its furtherance the thirty-five overt acts previously recited.

That the indictment is inartificially drawn, badly organized, and unskilled, need not be further demonstrated. It is not, however, for such reasons alone, in the light of modern thought and statutory enactment, to be stricken down as failing to state an offense or to sustain a conviction. That the difficulties which confronted the pleader were self-imposed is plain to see. Conceiving the mailing of each letter which contained forged supply orders to be a distinct substantive offense under the mail fraud statute, as undoubtedly it is, Badders v. United...